January 08, 2010

New Rules Could Inflate Lobbying Tabs This Quarter

New guidance on lobbying disclosure filings is pushing companies to report higher expenses for the first quarter of 2010 than they have in past years.

Late last month, the Secretary of the Senate and the Clerk of the House released the revised guidance, a routine happening based on issues that have come up in the past. The new guidance advises filers to report all trade association dues connected with lobbying activity in the quarter in which they are paid.

Most trade association dues are paid in the first quarter. In the past, companies have spread those expenses over all four quarters of reports, keeping their lobbying expense numbers more evenly divided over the course of the year, said Kenneth Gross, a partner at Skadden, Arps, Slate, Meagher & Flom who advises clients on lobbying disclosure compliance.

"It was good faith to report the dues that you paid, say, in January, over [all four] quarters because that's how you used it," Gross said. But now, "most large corporations are members of a number of trade associations. If they pay it all in the first quarter, which is typical, you'll see a big jump in the first quarter" numbers.

That means first-quarter reports this year could reflect a big jump in lobbying expenses over the first quarter of 2009, and a corresponding drop in later quarters, making comparisons more difficult.

Other revisions include a requirement to more comprehensively disclose the interests of foreign parent companies and affiliated foreign companies, Gross said.